Japan’s Financial Services Agency (FSA) is moving forward with plans to revise the Financial Instruments and Exchange Act to officially categorize cryptocurrencies as financial products, while also introducing new insider trading rules for the sector.
The goal behind these changes is to prevent unethical trading and enhance protections for investors in the cryptocurrency space, which is rapidly gaining traction.
The FSA’s proposal will align crypto trading with the regulations that govern traditional financial markets, making it illegal to trade crypto assets based on non-public, insider information.
This shift is a significant step toward recognizing cryptocurrencies as legitimate investment options and bolstering regulatory oversight as market participation grows.
To create a robust regulatory framework, the FSA has been collaborating with industry experts in private working groups since October 2024.
These sessions are aimed at refining the current regulations and addressing gaps in the system. The updated legislation is expected to be presented to Japan’s National Diet by 2026.
Japan has been a leader in crypto regulation, setting a precedent with its rigorous licensing requirements for cryptocurrency exchanges, particularly after several notable security breaches in the past.
Editorial Team
Reporter at Coindoo
Source: https://coindoo.com/japan-moves-to-classify-cryptocurrencies-as-financial-products-strengthen-regulations/